Park Bank v. Schneidermeyer

Smith, P. J. This case., as it is disclosed by the record before us, may be stated in this way: On March 19, 1881, the business firm of Iker & Schneidermeyer, the latter being the defendant, made their note to plaintiffs, private bankers under the name of the Park Bank, for $516.11; and on April 3, 1882, said firm made a further note to plaintiffs for $1,439.04. The said firm thereafter continued to be customers and depositors of said'plaintiff s’ bank, until the retirement of Iker. A number of payments were made on the latter note. The defendant succeeded to the business of the firm. He also did his banking business with the plaintiffs. On July 30, 1888, defendant’s deposits in the plaintiffs’ bank amounted to $1,432.81, of which amount, plaintiffs applied $360.72,-as a payment on the first of the above described notes and $1,072.09 on the second. When defendant’s pass book was balanced up, this was made there to appear. The defendant, on discovering this, inquired of the plaintiffs why it had been done and was answered by them, that they “might as well keep this money while they had it.” Defendant then asked if plaintiffs “were going to shut him off,” and to which plaintiffs replied that “he might keep on as before.” Nothing further appears to have been said about the matter by either party. The defendant continued to do business with the plaintiffs, as before, until he retired from business a year later. This, suit was brought on the notes, to recover the amount due thereon. The defendant interposed as a defense the plea of the ten years statute of limitations. The plaintiffs replied in avoidance of the bar of the statute, that the defendant had made the payments on each of the notes, which we have already stated. If the transaction of July 30, 1888, by which plaintiffs applied the .defendant’s deposits, as a credit on said notes, constitutes a payment, then clearly the action [183] was not barred and the judgment which was for the plaintiffs must stand. It is a well settled-principle that, where a depositor in a bank is indebted to the bank by bill, note, or other indebtedness, the bank has the right to apply so much of the funds of the depositor to the payment of his matured indebtedness as may be necessary to satisfy the same. 2 Morse on Banks and Banking, sec. 559; Bolles on Banks and Dep., sec. 403; Bank v. Newton, 8 Bradwell (Ill.), 563; Bank v. Hughes, 17 Wend. 94; Marsh v. Bank, 34 Barb. 228. In this state, it has been expressly decided that when a discount has been made by a bank and the note has matured, so ..as to create an indebtedness from the depositor to the bank, all funds of the depositor which the bank has at the date of the maturity of the discounted note, or which it afterward acquires in the course of business with him, may be applied to the discharge of his indebtedness to the bank. Muench v. Bank, 11 Mo. App. 144; Ehlerman v. Bank, 14 Mo. App. 591; Bank v. Carson, 31 Mo. 191. The case under the law is not different than if the defendant, when he gave his notes to plaintiffs, had said to them: “that any deposits I have with you, when my notes mature, or that I may thereafter have, I authorize you to apply to the payment of my notes, till they are discharged.” It may be assumed that if the defendant had expressly given the plaintiffs such direction, and in pursuance thereof they had made the application of the defendant’s deposits to the payment of his note, he would not make the contention that he does. The defendant can no more be heard to claim the payment was an involuntary one, than if it had been made by an agent expressly authorized by him. ■ But if the law were otherwise and plaintiffs were invested with no implied authority, in the first instance, [184] to make the application of his deposit to the payment of his notes, yet, since it clearly appears that after he had been fully advised of such application by the account current which was delivered to him by the plaintiffs, he sanctioned the same, it will not do to say the application was without his privity. Bender v. Markle, 37 Mo. App. 234; Beck v. Haas, 31 Mo. App. 180. Our conclusion is that the application of the defendant’s deposit on his notes constituted, pro tanto, payment thereof, and was sufficient to arrest at that point the running of the statute of limitations, so that the plaintiffs’ action, when brought, was not barred. The judgment will be affirmed. All concur.